Mediclaim Deduction (Health insurance Deductions)

Mediclaim Deductions & Policy Exemptions from Taxes

Purchasing a medical insurance coverage has never been more important than it is now. When you have a medical emergency or are receiving scheduled treatment for a disease, you will need to go to the hospital. In India, having a decent mediclaim coverage not only assists you in dealing with the high costs of hospitalization, but it also provides you with several tax benefits under Section 80D of the Income Tax Act.

When you obtain a floater mediclaim insurance plan for yourself or your family, you may take advantage of the tax benefits. So, you may rest comfortable that the next time you submit your income tax returns, you will be able to claim a deduction under section 80D. While the Indian government is focused on delivering high-quality healthcare to its residents, it is also giving individuals with tax incentives under the 80d provision, which allows them to save money by purchasing medical insurance.

Continue reading to learn how much money you might save under the Income Tax Act’s provisions.

mediclaim deductions
mediclaim deductions

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What Tax Advantages Come with Purchasing a Mediclaim Policy?

Section 80D Deductions are available to you.

You are based on the premiums you pay for medical insurance.

Scenario 1: You purchase a mediclaim policy that covers you, your spouse, and your dependant children.

In this situation, you can claim a deduction of Rs 25,000 for the premium you pay towards the insurance policy over the course of a financial year. It applies if the policy’s covered participants are under 60 years old.

A larger deduction of Rs 50,000 is available if any of you or your spouse is 60 years old or older.

Scenario 2: You decide to get a medical insurance policy that covers you, your family, and your parents. In a financial year, if your parents are under the age of 60, you are entitled to an extra deduction of Rs 25,000. In this situation, your total annual deduction will be Rs 50,000 (Rs 25,000 + Rs 25,000).

mediclaim deduction
mediclaim deduction

Scenario 3: You decide to get medical insurance for yourself, your family, and your elderly parents.

You are entitled to a Rs 50,000 discount if your parent or mother is a senior citizen. If you are under 60 years old, you can claim a total deduction of Rs 75,000 (Rs 25,000 + Rs 50,000).

If you’re also a senior citizen, your total mediclaim deduction would be Rs 1,00,000 (Rs 50,000 + Rs 50,000).

In the above situations, the Rs 50,000 discount for old persons covers extremely senior citizens aged 80 and beyond.

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Deductions for a Mediclaim policy with a single premium.

A customer opting for an insurance policy with a validity of more than one year pays the premium amount in a lump sum under a single premium mediclaim policy. In other words, he pays the premium all at once. According to a government provision introduced in the 2018 Budget, such persons can claim a discount according to the number of years the program is in effect. The mediclaim deduction is calculated by multiplying the total premium paid in one lump sum by the number of years the insurance policy has been in force.

For example, if an individual is required to pay a premium of Rs 36,000 over the course of two years, he can deduct the amount proportionately. Each year, the sum would be Rs 18,000.

The deduction must not exceed the applicable limit of Rs.25,000 or Rs.50,000.

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What are Section 80D Exclusions?

80D Deduction
80D Deduction

While a policyholder is entitled to Section 80D benefits on health insurance premiums paid, there are some exceptions:

• Only the taxpayer, not any third party, is responsible for paying the premium.

• If your employer pays your group health insurance premium, you are not eligible for tax advantages.

• Tax deductions are not available for premiums paid on behalf of working children, siblings, or extended family members.

• The mediclaim Section 80D tax benefits do not apply to cash payments for premiums.

Even if you receive medical treatment outside of India, you may be eligible for tax breaks. Your mediclaim insurance policy must include this clause and be approved by the IRDAI in order to ensure this. If you don’t have mediclaim 80d, you won’t be able to use it.

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Often Asked Questions – Mediclaim Deductions

Q) Are medical expenses eligible for an 80D deduction?

Ans: Yes. Section 80D of the Internal Revenue Code allows policyholders to save money on taxes by claiming medical insurance for themselves, their spouses, and their dependent parents as a tax deduction before paying taxes.  To be eligible for medical expense reimbursement, a person must be 60 years old or older.

Q) Is there a distinction between 80C and 80D?

Ans: Tax deductions are available under Section 80C for ULIPs, PPFs, ELSSs, EPFs, and LIC premiums, among other tax-saving investments. Health insurance premiums for self, family, and parents, as well as expenses for preventive health check-ups, are eligible for Section 80D deductions.

Q) Is 80C compatible with 80D?

Ans: Aside from Sections 80C and 80D, there are other ways to save money on taxes. Sections 80C and 80D of the Income Tax Act are the most frequently used tax-saving provisions. Section 80C allows you to deduct popular investments like EPF, ELSS, ULIP, and NPS.

Q) What exactly is the difference between 80D and 80DD?

Ans: Sections 80DD and 80U are primarily concerned with medical expenses for which tax deductions can be claimed. The deduction must be claimed by the individual or his or her immediate dependent in both of these sections.

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